Why companies invest in electric vehicles

At this moment 40% of 2016 registered cars are electric vehicles (EV’s) in Norway. The country has a higher number of all electric battery only cars: more than 100.000. On the second place stands the Netherlands, which intends to phase out all fossil fuel powered automobiles by 2025. Although 0,2% of the global car fleet are a hybrid or EV’s, this transportation technology is here to stay. Global EV sales rose to 30% in 2016 compared to the previous year. It works as follows: When you push on the pedal it sends a signal to two potentio metres, which delivers it to the controller. The controller reads the petentic metres and the controller converts DC volts from the batteries to AC volt. In this article we explore why companies invest in electronic cars, why they choose for electricity and which hurdles are being crossed. 

EIA’s Annual Energy Outlook 2017 forecasts that Ev will share 8% of the USA market share in 2025. And according to BP’s 2017 Energy Outlook report Ev’s have a 6% global market share by 2035.”On the other hand, Bloomberg New Energy Finance predicts that 35% of the global new car sales are Ev’s by 2040. The USA Energy Information Administration expects that 7,5 million Ev’s hit the road in 2025. All of them forecasts that oil demands continue to rise into 2040 and beyond. M. Liebreich, the head of Bloomberg New Energy Finance, says oil demand peak in 2025. The same peak lies 5 years apart with the World Energy Council in 2030.

Automakers are often teaming up with parts suppliers for the fast growing Ev in order to compete better in the ”green” car segment. An example is the investment of 44 million dollars by Honda Motor joining forces with Hitachi’s auto parts. 51% is owned by Hitachi Automotive Systems and 49% by Honda. And BMW, Ford, Daimler’s Mercedes, Volkswagen’s Audi and Porsche are partnering up to create a ”quick build-up of a sizable number of stations in order to enable long-range travel for battery Ev drivers. ”The project across Europe deploys 400 stations, which will feature level 2 AC, level 3 DC and ultra fast high powered chargers, starting in 2017. The ultra-fast chargers are able to deliver 350kWh, this is twice as much as the Tesla Supercharger of 145kWh. The venture is separate of the Ultra E project. Developements come out of all directions, such as: ”We’re developing a new Mexican electronic vehicle that will not only be assembled {in Mexico}, but also designed and modeled to meet the needs of Mexican consumers,” E. Massari, Gian Motors CEO for Latin America. The car manufacture, owned by Mexican billionaire C. Slim Helu, plans to launch the made-in-Mexico electric vehicle commercially in 2018. And China’s sudden emergence in the non-emitting gas friendly cars peaked the global Ev market with 34% in plug-in sales in 2015. Carmakers in the US and Europe see China as the most important market for production sales. General Motors sell 35% of Ev’s in this country.

At the North American Autoshow in Detriot {USA} Samsung’s battery division announced a new battery for electronic cars. After just 20 minuted of charging, you will be able to drive up to a range of 500km with the exception of Tesla Model S, which requires a 20 minute loading time for 315 miles. Currently electronic cars are equipped with a battery module capacity of 2-3KWh (12 cells). However, Samsung’s battery module has a capacity of 24 cells and 6-8 kWh. They are fast charging, have high energy density battery cells and an integrated battery module. It has the potential to transform the car market. These new technologies are focused on manufacturing efficiency and user convenience Samsung SDI says that these Ev batteries are developed to become lighter and more powerful, than today’s units in order to go into mass production in 2021.

Analysts say the Ev will grow rapidly, but it’s unpredictable when this will happen. The Ev growth rate will have huge implications for oil markets, auto markets and electric utilities.With Ev’s you got plusses and minuses. First, we start with the benefits of owning an Ev. The biggest benefit is that Ev’s don’t use or emit gas. Since the average American spends between $2000 and $4000 on gas every year. In most parts of the world electricity is significantly cheaper than petroleum. If you take at the increasing efficiency rate of Ev’s compared to internal combustion (traditional fuel), Ev’s are much cheaper fuelling. With an added bonus that governments have positive Ev polities such as no road tax and your insurance is cheaper. Furthermore, Ev’s are low maintenance, there is an absence of an internal combustion engine. This requires a regular service, because it’s a seriously complicated piece of machinery. Ev’s are simple with only one moving part thus there’s less going wrong, resulting in decreasing service costs. For example brakes don’t have to be replaces often. Lastly, Ev’s are quick, quiet and safe. The vehicles left the outdated and clunky parts of internal combustion cars behind and drives instantly with one step on the accelerator. Because of technological advancements Ev speeds aren’t an obstacle anymore. Some sceptics were worried about the unknown dangers of electronic field exposure during an Ev ride. According to seven country studies the exposure to magnetic fields are lower than 20% of the value recommended by the International Commission on Non-Ionizing Radiation Protection (ICNIRP).

On the other hand, you got the disadvantages of Ev, such as the Ev’s range capabilities are currently on the lower side, that’s being offered. Consumers have to watch out so they aren’t running out. Public charging stations are beginning to emerge, but this doesn’t mean there is one nearby or that the charging time is shorter. It can result in a waiting line of Ev’s. Unless you’re driving in Scandinavia with an all electric plug-in vehicle, it’s still difficult to travel long distances in Europe. Because Europe only has 100.000 charging spots and most of them have slow chargers, which takes up to 8 hours to fill up your Ev. Since 2013 Europe’s charging infrastructure grown on an annual basis 30% to 60%. It’s the result of European car makers that lobby in the government to provide tax incentives and bigger rebates to stimulate the domestic market. The European Union considers a new policy, where it required to have a recharging point in buildings with more than 10 parking places. According to M. Jozwick of EU E A: ”It sends a –taken seriously.”

After building and designing Ev´s, car companies face two big hurdles: charging network and the charging time. The construction of a charging network can be a potential nightmarish additional costs, because you won’t fuel Ev cars with traditional fossil fuels. The automaker has to open it’s own ”gas stations”. Tesla owners can fuel their Ev at one of the expensive supercharger faster-charging network, because home electric fueling takes allot longer. In order to avoid the big burden automanufacturies partnered up. According to Bloomberg’s T. Lavell”:” ”’. It basically takes longer to grab the market, because for years Ev’s are more expensive, offering less range and are difficult to refuel. Consumers are aware that Ev hasn’t fulfilled its full potential and going for the self-driving semi-autonomous cars, which is less expensive to develop. Current Ev programs risk that the consumer won’t use charging networks and Ev’s. However, Tesla has shown that Ev’s aren’t glorified golf carts and from an energy viewpoint Ev’s make sense: they’re easier to maintain and build without tailpipe emissions. And lastly the overall battery life is expected to be around a decade, but it you have to replace it, the costs will be in the thousands of dollars. All these problems are being resolved with the rapid technological developments and increasing investments in Ev’s.

According to a new study from the Carbon Tracker Initiative and the Grantham Institute for Imperial College London the costs of Ev’s are decreasing . ”Falling costs of electric vehicle and solar technology”, they conclude,”Could holt growth in global demand for oil and coal from 2020.” The study also said: ”Oil demand could be flat from 2020 to 2030 then fall steadily to 2050.” ”Ev’s could make up a third of the road transport market by 2035, more than half the market by 2040 and more than two-thirds of market share by 2050.” In this report they base it on the result what countries said they would do with the Paris Climate Agreement and the cost curves demonstrated by PV, EV’s and batteries so far. Most forecasters and energy companies report otherwise: oil needs rise and the expectation that coal needs rise at least through 2030. If the new study becomes a reality, fossil fuels could lose 10% of the total market to PV and EV  within a decade. Todays costs and policy changes are both rapid and inevitable like with other new energy technologies, if it’s widespread, supported through international policy and consumers alike, it takes off exponentially. ”The partnership—–by the end of 2016.” Bloomberg.

In conclusion rapid advances in Ev technology are still growing at this moment.  And newfound commitment to the Paris Climate Change Agreement influenced the current car market. For example the cost of lithium ion batteries has dropped by two-thirds since 2010, which accounts for 40% of an Ev or hybrid vehicle. Now it goes for less than 350 dollars, six years ago, it was more than 1000 dollars and it could be 125 dollars in the near future. Furthermore, battery technologies develop steadily on an expected 5% efficient a year. For example, improving ”energy density” of lithium-ion batteries in order to store more power with less weight. Also the range capabilities are growing of Ev’s. There’s a high chance you see a lot of electronic vehicles in your neighborhood or driving by on the road. 

Sources released with quarterly magazine